Steel imports are at the forefront of many market players minds right now, with an influx of foreign products affecting service center inventories and buying decisions, and even leading to calls for more port infrastructure investment.

Heavy imports earlier this year, along with lingering uncertainty about demand, could cause service centers to reduce their steel plate purchases through the end of 2012, according to Jeffery J. Moskaluk, chief commercial officer of Lisle, Ill.-based plate producer SSAB Americas.

We would certainly expect service centers to remain cautious on purchasing for inventory in the fourth quarter, he said.

Moskaluk, who addressed an Association of Women in the Metals Industry meeting in California in September and was interviewed briefly by AMM afterward, noted that most distributors plate inventories have been climbing in recent months.

According to the most recent Metals Service Center Institute data, U.S. distributors steel plate inventories in both August and September were equal to 3.3 months supply at then-current shipping levels, up from 3.2 months in July and well above 2.8 months supply a year earlier.

As inventories climb, service center requirements are being reined in, Moskaluk said, with SSAB first starting to notice signs of reduced buying in July.

The U.S. steel plate market also is living with the consequences of a really large glut of imports in the second quarter, he said. While a lack of trade barriers in the United States is partially to blame, it also appears that much of the foreign tonnage arrived at below fair market value. In addition, slightly higher-than-average prices in the U.S. market compared with other global markets also attracted the foreign tonnage, he said.

But demand has since fallen in the domestic market, and at some point importers paying to finance this newly arrived inventory will be forced into a cash decision to unload it. At some point, theyve got to sell it, Moskaluk said, noting that it will be difficult to predict how long it will take to work off the overhang, given still-unanswered questions about supply and demand.

Those who are bringing steel products into the United States also have concerns--albeit of a different sort. Steel importers are urging Congress to make the nations ports and dredging needs a top priority.

At issue is the Harbor Maintenance Tax, a 0.125-percent federal levy imposed on cargo values to generate funds for dredging maintenance at U.S. ports. Port and shipping interests say that the funds estimated $6-billion surplus hasnt been used as intended.

This issue doesnt only affect steel importers, but also the domestic steel industry (guy) who (gets) pig iron up the Mississippi River to his facility or coal to his coking facility, American Institute for International Steel president David Phelps told AMM. The dredging issue is a serious one, and clearly, if you have silting in a harbor, youre forced to put fewer products on the barge. This adds costs to the entire logistics chain.

This past summer, President Obama signed legislation that maintains funding for the nations roads, bridges and other transportation infrastructure for 27 months. While the legislation requires Congress to use revenue collected via the tax, some have maintained that its wording isnt strong enough.

Americas harbors and navigable waterways are essential to the economic health of the country, yet they are becoming increasingly narrowed and silted in, reducing their carrying capacity and increasing the cost of moving cargo, the two wrote in a letter to AIIS members. Congress has ... not only failed to appropriate adequate funds for these purposes, but has routinely used (Harbor Maintenance Tax) funds for unrelated purposes.

They also endorsed the Realize Americas Maritime Promise Act, a bill that would require the full amount of fees collected by the trust fund to be used for port maintenance. The bill, which was introduced in the House in January 2011 by Rep. Charles W. Boustany Jr. (R., La.), was referred to the Transportation and Infrastructure Committee and hasnt moved forward since.

This (issue) is not only for importers, but domestic shippers as well, Phelps said. Were already paying for this, so its just a matter of making sure that Congress is doing the job it promised.

Proponents of the bill say that it would address any infrastructure needs that may arise from the expansion of the Panama Canal, which is slated for completion in 2014.

An upcoming report by the Army Corps of Engineers will assess the impact of the expanded canal and suggest how to modernize this countrys waterways, according to a Politico story in May, which quoted Sen. Lindsey Graham (R., S.C.), a member of the Senate Appropriations Committee, as saying that deeper ports are the economic gateway to the world.

In the Politico story, Susan Monteverde, vice president of government relations at the American Association of Port Authorities, said, No matter what, the Panama Canal is an area to make us wake up and say, Do we have modern ports?

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